Lou’s Restaurant & Bakery in Hanover Is Sold

Toby Fried, right, and his wife Pattie have sold Lou's Restaurant to Jarett Berke, left. Lou Bressett, the restaurant's original owner, looks down from his portrait on the dining rooms wall in Hanover, N.H., Tuesday, July 3, 2018. (Valley News - James M. Patterson) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Hanover — The town’s landmark institution is going through an evolution. And no, it’s not Dartmouth College.

Lou’s Restaurant & Bakery owners Toby and Pattie Fried, who have owned and run the South Main Street eatery for almost three decades, have sold the restaurant to Jarett and Cailin Berke, a young Hanover couple with three children who moved to the Upper Valley three years ago when Jarett Berke enrolled at Dartmouth’s Tuck School of Business.

The sale marks the third time in Lou’s 71-year history that the restaurant, opened in 1947 by Lou Bressett, a decorated Marine and World War II veteran, has changed hands. Berke, in a joint interview on Tuesday afternoon with Toby Fried, offered assurances that he doesn’t plan to upset the cider doughnut basket at the breakfast and lunch spot long favored by area residents and generations of Dartmouth students and faculty alike.

“I love Lou’s exactly as it is,” Berke said. “Especially in the beginning, I’m going to learn all I can and soak everything up.” He promised a “seamless transition” for the restaurant’s 35-person staff and the customers who crowd the 16-seat counter and 74 seats in the dining room daily during two work shifts.

The 60-year-old Fried said he plans to help the Berkes with the transition over the next several months, but otherwise the sale marks what he hopes, after 27 years in the restaurant business, will be semi-retirement, at least for a while.

“What am I going to do after this?” Fried rhetorically asked from the confines of his cramped, windowless office in the basement of the restaurant. “Good question. But I’m not going to get myself locked into something like this again,” he laughed, alluding to the grueling hours required to manage a seven-day-a-week operation that served nearly 133,000 customers and poured more than 57,000 cups of coffee last year.

Berke, 36, a former U.S. Marine Corps captain and helicopter pilot who flew missions in Afghanistan, and his family arrived in Hanover three years ago when Berke enrolled in the Tuck School of Business. Since graduating in 2017, Berke has worked as vice president of growth at Bionic Advertising Systems, a Hanover company that develops management software for advertising.

Bionic’s company offices are above the Dartmouth Bookstore, and Berke frequently found himself heading across the street for his particular breakfast favorite, “The Big Green” cruller French toast.

Restaurant Industry Ties

In fact, Berke has been around the restaurant business much of his life. Growing up in New Rochelle, N.Y., outside of New York City, his father and his brothers had a garment manufacturing business. But they also own and still operate Caliente Cab Co., an established Mexican restaurant in the heart of Greenwich Village that has been around for 30 years.

But Berke, influenced by family members who had fought in World War II, instead had his sights set on a military career and went off to the U.S. Naval Academy in Annapolis, Md., then to flight school and the Marines, where he spent a decade piloting the mammoth Sikorsky CH-53E heavy-lift cargo helicopter and completed four deployments in Afghanistan, east Africa and the Arabian peninsula.

Back stateside and selected for promotion to major, Berke said he was faced with the unappealing prospect of moving his young family to “a different city every year” for the indefinite future. But shifting to the “business side” of the Marines, where he was attached to a unit that purchased flight simulators, gave him a window into other possibilities, he said, and the decision to pursue an MBA degree.

And given Tuck’s traditionally strong relations with veterans among the Ivy League business schools, Hanover was an inviting destination. Yet while the typical pathway for Tuck graduates are glamorous jobs in investment banking, consulting and the tech sector, Berke said his family background in manufacturing and restaurants made running his own show in small business more appealing.

Then a friend who works at the Hanover accounting firm Gallagher, Flynn & Co., aware of Berke’s long-term goal, off-handily mentioned to him this past winter that the owners of Lou’s were looking to retire and wanted to find — in Fried’s words — “the right person” to entrust their restaurant and preserve the legacy they had spent nearly 30 years building.

“As I got to learn more about the business and how well run, strong and consistent it is, it became clear this was a good thing. I’ve always wanted to take over from a retiring owner, which has been my goal rather than venturing into a startup, where the risks are much higher,” Berke said.

“The staff here is stable, dependable and reliable. It’s a great group of people. This is certainly not a turnaround situation,” he added. “It’s don’t-touch-anything and just go.”

Berke credited not only Gallagher, Flynn & Co., but also Ledyard National Bank with providing valuable guidance on shepherding the deal, which was made possible with a loan from the U.S. Small Business Administration. Berke and Fried declined to disclose the purchase price.

For Fried, the sale of Lou’s — he and his wife will continue to own the building and lease the space to the Berkes, although Berke said it is his hope to eventually acquire the property — marks the winding down of a career that he initially did not foresee when he was studying industrial engineering at Northeastern University in Boston.

‘I Knew Pastries’

Growing up in Vienna, Austria, as the son of a scientist who worked for the United Nations, Fried spent his first years out of college working as an engineer for Texas Instruments and Raytheon. But Fried said corporate America left him feeling unsettled — perennial rounds of layoffs triggered by downturns in the economy were particularly unpleasant — and he indulged a passion for baking by making cakes at office parties.

“I spent my youth in Vienna. I knew pastries,” Fried attests.

That led Fried to enroll at Johnson & Wales’ culinary school in a program geared to nights and weekends in order to keep his day job in the corporate world. Fried eventually was able to make the leap full time as a baker at Mountain Creamery in Woodstock. When Fried and his wife were ready to break out on their own, they began hunting for their own restaurant to buy.

Fried got word that Bob Watson, who had acquired Lou’s from founder Lou Bressett in 1980 after Bressett retired, was himself, after 12 years of owning the eatery, looking for someone to take it over. Initially, Fried recalled, he was only interested in acquiring the bakery portion of the business but it quickly became apparent that the bakery and restaurant could not easily be split off from each other.

The 1990s were a period of experimentation and trial and error with the Frieds as they learned the restaurant business and negotiated customers’ evolving palates and trends in food.

Watson, the previous owner, had introduced a Mexican menu at the dinner menu, and for several years Lou’s was known as a destination for quality Mexican cuisine, still a relative novelty in Northern New England. Later, Fried introduced a dinner menu that featured German cuisine.

“We had homemade rolls, wiener schnitzel and knockwurst,” Fried said.

But the dinner shift — at one time Lou’s was open around the clock from Friday night to Monday morning — was always “boom or bust” and not steadily reliable. Although a Tuck School professor and his students volunteered and undertook a business evaluation plan — they concluded the alternatives were either “New York-style deli sandwiches or close it” — the Frieds decided to end the third shift.

That enabled the staff to focus on breakfast and lunch and perfect the homestyle yet contemporary menu Lou’s offers today with dishes such as gluten-free egg white French toast and falafel sandwiches alongside old standbys such as grilled cheese, BLTs and turkey clubs.

“We didn’t lose any revenue and saved a lot of money,” Fried said. “It was one of the best decisions.”

Berke said he and his wife, Cailin, who works as a teaching assistant at the Hanover preschool Toddler’s Morning Out, are the kind of people “who like to get their hands dirty” and said the staff can expect to see them wash dishes, bus tables, and work the cook line and fryers. (The help likely will be appreciated: the kitchen in 2017 churned out 35,201 crullers and 26,812 cider and cake doughnuts on top of 5,624 orders of cruller French toast.)

But Berke acknowledges that as good as he is with numbers and business plans, he still has a ways to go on some of the basics of the restaurant business.

“Baking is not my forte,” he said. “When things started getting serious with the purchase, I bought a culinary textbook on pastries. The thing I love about it is it’s so scientific.”